Navigating Care Costs – help with payment

There are several options available to access care in your later years.  You may arrange help in your own home or decide to move to “easier” accommodation or sheltered housing.  Or you may decide to go into residential care which you choose and pay for privately. If you in the fortunate position to be able to fund these options yourself  you have the opportunity to decide what suits you best.

If, however, you find you cannot afford these cost you may require assistance from the local authority, including asking them to cover some or all of the costs of residential care.  If this applies to you the following information may be useful:-

There are effectively three elements to care costs:-

  • “Accommodation” costs
  • Personal care costs
  • Nursing care costs

Accommodation Costs

Whether the local authority will fund the cost of where you stay is means tested.  This is based on nationally set rules, which ensures you can retain some money for your personal use.  At the date of writing the amount which can be retained is £29.30 per week.  Most sources of income, including pensions, will be taken into account when deciding what you should pay but some pension income is disregarded if required by a spouse or civil partner.

The assessment also looks at capital. The figures below apply as at 12 April 2021.

  • For individuals with capital of more than £28,750 the local authority will make no contribution to “accommodation” costs. What is included in “capital” is discussed later.
  • For individuals with between £18,000 and £28,750 the local authority will “part-fund” the costs and this takes into account your level of income. Your actual capital is assessed as notionally giving you an income.
  • For individuals with less than £18,000 the local authority will fully fund the costs in a local authority approved care home unless your income is sufficient to pay the costs. In this case your capital is not assessed.

Such funding for “accommodation” costs may also be available in a private care home but it is important to ensure that the local authority will be able to agree a contract with the home at the outset if you think you may have to rely on this.  It may be possible, as part of this contract, for third parties to agree to “top-up” costs where there is a gap between the home’s charges and the local authority’s contribution.  Those third parties, often family members, might be asked to give written confirmation.

The local social work department has to carry out an assessment too to establish if an individual’s needs are such that personal care (and if appropriate nursing care) costs are to be paid.  These are set out below.

Your social worker will often organise a move to the home, which must be suitable for your needs as they have been assessed.  Whilst, working with social workers, you can express preferences there may not be the same element of choice as in situations where you make a private arrangement.  And if a place is needed urgently you often have to accept what is available, although there may be circumstances where you can be put on a waiting list for another preferred location.  It is also possible to arrange trial periods.  The full financial assessment is not required for the first eight weeks of a temporary stay.

Personal Care Costs

Subject to the social work assessment the amount payable, as of 1 April 2021, is £193.50 per week to fund your personal care costs.  This can be paid directly to a care home although there are options for direct payment if you wish to organise your own care.

Nursing Care Costs

The position with nursing costs is the same as for personal care costs.  However, the amount you will receive each week is currently £87.10. Not everyone who is assessed as requiring personal care assistance will necessarily also need nursing care.

It is important to note, however, that if you qualify to receive this free personal care and/or nursing care then you may lose your entitlement to Attendance Allowance or the Care Component of Disability Living Allowance.

Means testing – more details on capital

It is also important to note that, when looking at means testing for the “accommodation” costs, for married couples and civil partners any assessment includes a half share of any joint assets.  Which may include the family home.

Your existing home is part of the capital which is means tested and, subject to the protection given to spouses and certain dependants who continue to live there, you will be expected to use that capital before accessing financial support.  There is provision to defer payments for a period to allow a sale to be concluded. If you find yourself in that situation it is sensible to keep in touch with your local authority, so that the arrangements can be agreed.  The local authority may choose to request a charging order over the property to protect their position but   it may be possible to agree deferred payments too.

If the property you live in is not owned by you this may not be relevant unless you have gifted it away with a view to avoiding the implications of this assessment.  In those circumstances, the local authority can still view the property as being notionally yours.  This also applies to any other capital you have given away under the “deliberate deprivation of capital” rules.  There is no strict time limit beyond which the local authority will not question such gifts although, in practice, the further back in time they were made the less likely they are to have been in contemplation of these care needs. If the gifting was part of a planned tax mitigation exercise that can also justify those actions. Gifting your home or any other asset may, of course, contain other traps for the unwary so advice should be sought before proceeding to part with your assets.

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The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.

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